How long is a home appraisal good for in an inheritance situation. It was appraised almost 2 yrs ago. market has changed

Question

The original appraisal for home was done in March of 2022. Is that appraisal considered old and inaccurate now due to economy and inflation?

Mark Oakley · Answer

For what purpose?  An appraisal is required of real property in an estate to ascertain its value as of the date of death of the decedent. This fixes the stepped-up tax basis of the heirs for calculating capital gains tax (or loss) following that date as the market value changes. If there were any inheritance or estate taxes due, the date of death appraisal also fixes the value for those calculations. Most estates do not have estate or inheritance taxes due; however, it is possible for the estate to have an income tax due based on sale of property that appreciates in value between the date of death and its sale prior to distribution of the proceeds to the heirs. In the scenario where the property is deeded to the heirs, then the heirs pay the capital gains tax on the increase in value (unless they qualify for the $250,000 tax credit for living in the property as their primary residence). If your question has to do with obtaining a loan, that’s up to the lender and prevailing federal loan requirements for resale of the mortgage in the financial markets. In a loan situation, they will require a more recent appraisal, typically within 90 days.

Q: How long is a home appraisal good for in an inheritance situation. It was appraised almost 2 yrs ago. market has changed